Consumer Surplus Calculator

Formula

The formula to calculate the Consumer Surplus (CS) is:

\[ CS = MP - AP \]

Where:

$ CS $ is the consumer surplus ($)
$ MP $ is the maximum price the customer is willing to pay ($)
$ AP $ is the actual price the good is sold at ($)

What is Consumer Surplus?

The consumer surplus is defined as the difference between the maximum price a customer is willing to pay for a good and the actual price the good is sold at. It represents the benefit or value that consumers receive when they pay less for a product than what they are willing to pay.

Example Calculation

Let's assume the following values:

Maximum Price Willing to Pay (MP) = $100
Actual Price (AP) = $75

Using the formula to calculate the Consumer Surplus:

\[ CS = 100 - 75 = 25 \]

The Consumer Surplus is $25.